Cross Margin mode is the default margin mode on Bybit. Auto-Margin Replenishment (AMR) is only available under isolated margin mode, where the margin that you placed into a position is isolated from your account balance. Bybit will not automatically extract any additional margin from your available balance to your position. That also means, under this mode, the maximum amount you will loss from liquidation is the initial margin you placed for the particular position.
Isolated Margin is useful for speculative positions. By isolating the margin, users can have better risk control to limit the maximum loss to a position when the market is headed towards an unfavorable direction.
AMR is a function that allows traders to automatically add margin to existing open positions in order to avoid liquidation. Once AMR is enabled, every time your margin level is about to reach the maintenance margin level, Bybit will replenish the margin from your available balance. The amount drawn would be equivalent to the initial margin that is currently used for this position. If there is insufficient available balance, Bybit will utilize all of the remaining balance to replenish the margin of the position. Once margin is added to a position, you may also notice that the liquidation price will be further away from the Mark Price.
To activate/deactivate AMR, users can turn on the “AutoMargin” mode under the "Position" section.
When AMR is enabled, the lowest leverage the position will go is limited to 1x. More margin will not be added when a position is already at 1x leverage even if there is excess available margin.
Example: Auto-Margin Replenishment Process
A trader has an available balance of 10000 USDT. The current price of BTC is 8,000 USDT. He opens a Long position for 5 BTCUSDT contracts using an initial margin of 4000 USDT with 10x leverage. With the maintenance margin rate at 0.5%, the liquidation price is calculated to be at 7,240 USDT. The remaining available balance would be 6000 USDT.
Mark Price falls to 7,240 USDT and reaches the Liquidation Price, Auto Margin Replenishment will automatically take over the process and prevent the position from being liquidated. It will use an amount from the available balance to replenish the margin back up to 4000 USDT, leaving 2000USDT left in the available balance. The new liquidation price would now be 6,440 USDT, and the initial margin calculated for this position would now be at 8000 USDT.
Should the price of BTCUSDT continue to fall and reach the new liquidation price of 6,440 USDT, Auto Margin Replenishment will once again come into effect but this time, only replenishing the position with the remaining 2000 USDT left in the available balance. The new liquidation price of the position would now be at 6,040 USDT.
However, as there isn’t any available balance left in the account, should the price hit 6,040 USDT, the position would finally be liquidated as Auto Margin Replenishment would not automatically come into effect anymore to prevent the position from being liquidated.
1) When liquidation is triggered, the system will first cancel all unfulfilled active orders in the account in order to free up more available margin and use this to try and avoid liquidation
2) Please note that the calculations above do not include any trading fees
Example: Difference between Cross margin and isolated margin with AMR
Unlike cross margin mode which uses all the available balance to calculate the liquidation price, traders will be notified when AMR is triggered and this allows traders to have time to better manage their position.
*under isolated margin mode, both long and short position remains independent and can be liquidated in both directions.